Energy in Alberta

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Electricity and Gas in Alberta

Submitted by Hilary on Thu, 11/27/2014 - 04:05

Here you will find important information about your energy bills in Alberta.

In Alberta you have a choice of your energy supplier. The Alberta residential electricity market has been open to competition since 2001, and the residential natural gas market was opened in 2004. This means that you have options for your power and gas supply; you can purchase your energy from a competitive energy retailer, or stick with your local regulated rate provider.

What Kinds of Charges Are on My Energy Bills?

For both electricity and gas, the charges on your bills can be split into two categories: delivery and supply. Your local utility is responsible for ensuring the delivery of your energy to your home. They own, operate, and maintain the local energy distribution system (the power lines for electricity, or gas pipeline network for natural gas) that is connected to your home, as well as your meter. Your chosen energy retailer purchases your energy supply on your behalf, and is responsible for providing your billing and customer service. We've broken down what makes up your electricity and your gas bills if you want more detailed information. You can also find detailed explanation of your bill from a specific retailer on our suppliers page.

How Are Power and Gas Supplied to My Home?

You can understand your electricity and gas service as a four step process: production, transportation, delivery, and final use. For both electricity and gas, the first and final steps (production and final use) of the process have been opened to competition, while regulated utilities remain responsible for energy transportation and delivery. We've got more details about Alberta power and gas service in our dedicated article about Alberta energy market structure.

The Cost of Electricity in Alberta

Alberta is the only province in which the market determines the price of power. Alberta's electricity prices, while not the cheapest in Canada, are close to the average price for the country. As much of Alberta's electricity generation is based on fossil fuels (coal or natural gas) and because a large proportion of Alberta demand comes from industry, the market price of electricity tends to follow the price of natural gas and oil prices. This means that the price of electricity is fairly volatile, and can change quite quickly. While prices had been slowly increasing, since 2014 electricity prices have been decreasing slightly. In fact, spot prices reached a 15-year low in February 2015!

Natural Gas Prices in Alberta

In Alberta, as is the case in the rest of Canada, the price you pay for natural gas depends on the market prices. As the principal gas-producing province in the country, natural gas prices in Alberta are the cheapest in Canada. As the costs of transportation and storage are minimal, Alberta natural gas prices are also more sensitive to market price fluctuations than in other provinces. You can find more details in our dedicated article about the price of natural gas in Alberta.

Why Did Alberta Deregulated its Energy Markets?

The markets for power and natural gas were deregulated for different reasons. Deregulation of electricity markets in Alberta began in Alberta in the 1990s, in order to shift the cost of investments in new generation to the private sector and to reduce some of the costs of electricity regulation. Changes in technology at this time meant that large, vertically-integrated monopolies were no longer necessary for all of the steps in the electricity service process, which opened the possibility for deregulation and the introduction of market competition.

Deregulation of the natural gas service process began earlier, in 1985 with an agreement signed between the government of Canada and gas-producing provinces (Alberta, British Columbia, Saskatchewan) that introduced market competition in gas prices for the first time in Canada. However, the residential natural gas market was not opened in Alberta until about twenty years later, with the 2004 amendment to the Gas Utilities Act.

Why Choose a Competitive Energy Retailer?

Competitive energy retailers offer you greater choice regarding your energy supply. Whether you are looking for a cheaper energy price, to avoid price volatility, or for green energy, competitive energy retailers are able to offer you a wide variety of options for your energy that the regulated rate providers cannot. If you are interested in switching energy suppliers, we recommend that you check out our some of our articles on how to compare and choose your energy supplier.